Amazon's big logistics bets continue, opens largest fulfilment centre in Sonipat

15th Jul 2016
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Having received a $3 billion booster, Amazon India, on Thursday, opened its largest fulfilment centre in Sonipat, Haryana.

Source : Forbes
Source : Forbes

Sprawling across 200,000 sq. ft. and holding a capacity of 800,000 cubic feet, the fulfilment centre in Sonipat aims to help sellers in north India to stock their products with Amazon. This is Amazon’s 22nd warehouse in the country.

Just a week back, Amazon invested in six new fulfilment centres (FCs) to meet the growing requirements of its fast-increasing seller base in India. The new centres were to be set up in Chennai, Coimbatore, Delhi, Jaipur and Mumbai, bolstering the company’s presence in India ahead of the festive season.

The Amazon fulfilment centre is a modern facility equipped with e highly automated pick, pack and ship processes to facilitate safe and timely processing of orders.

Speaking about the centre in Sonipat, Akhil Saxena, Vice-President, India Customer Fulfilment, Amazon India, said,

It will enable thousands of small and medium businesses to save money by replacing their upfront capital expense with low variable cost and pay only for the storage space they use and the orders that we fulfil.

Although not disclosing the amount invested towards setting up this centre, Amazon India has claimed to increase their storage capacity by 1.5 times to 7.5 million cubic feet by the end of this year.

According to Akhil the Chennai warehouse (fulfilment centre) is expected to be as big as the Sonipat one. Further, about 80 percent of seller on Amazon opt for fulfilment services and over 1.3 million products are available for immediate shipping through fulfilment centres.

Reports in April suggested that Amazon India had surged past Snapdeal to become the second largest online marketplace in the country; closing in to rival Flipkart.

In an interaction with YourStory last month, Amit Agarwal, Vice President and Country Manager, Amazon India said,

“From our vantage point, we are already the leader...We have grown 250 percent year-on-year. In Q4 we sold more than the entire year last year. In Q1 of this year, we have grown by 150 percent year-on-yea, despite having a great growth rate last year.”

After having exhausted its investment of $2 billion in July 2014, Amazon India got a $3 billion booster shot from its parent Amazon Inc. in June this year.

Post the announcement, it was reported that for Amazon, the priority was to lower the cost for its sellers, while enhancing customer experience.

Amit Agarwal, Managing Director, Amazon India
Amit Agarwal, Managing Director, Amazon India

Over the last three years, Amazon’s focus has been on selection, low prices and more reliable delivery. Further, convenient payments and mobile transactions have also been a key focus for the e-commerce giant in the country. Amit said,

“When I look at selection, our focus has been on enabling sellers, training them, bringing them online and building infrastructure for them. When we look at lowering prices, our prime area of focus has been how we lower cost of operations for sellers so that they can offer lower prices.”

But Amazon needs to also watch out against conglomerates with deeper pockets including- the Tata group’s e-commerce platform – Tata CliQ; Aditya Birla Group’s online fashion store abof.com, Reliance Industries’ online fashion retail platform Ajio, and omni-channel platform NNNow.com from Arvind Ltd.

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